On
Monday, MDC Partners quietly put out a press release noting that company CEO Miles Nadal was shedding close to 40% of his shares in the company “in connection with the diversification of his
personal investments.”

The sell-off will drop Nadal from the first to the second-single-largest shareholder with approximately 11.1% of outstanding Class A Shares.

Yesterday, the
market reacted negatively, sending the stock down by 12% to close at $21.93 on the NASDAQ exchange. In early morning Wednesday trading, the stock was up at first but then sank slightly below
yesterday’s close, as it appeared shareholders were still unsure of what to make of Nadal’s move.

In its Monday announcement, the company said Nadal was selling 3.5 million Class A
shares worth an estimated $75 million via an underwritten offering being led by BMO Capital Markets. The firm has an option to buy up to another 525,000 additional shares from Nadal.

Rich
Tulio, a stock analyst who covers MDC for Albert Fried & Co., said MDC’s price drop represents a good buying opportunity. “Long-term fundamentals are still in place,” he told
StreetInsider.com. Tulio attributed the sharp price decline to “programmatic and flash trading anomalies,” but also said the underwriting hadn’t been managed very well.

With
the offering still in progress, MDC officials declined to comment. After the stock sale is complete, Fidelity Management & Research Co. will be the single largest shareholder in the Toronto-based
holding company with a little over 6 million shares, according to SEC filings.

Once the sale of Nadal’s 3.5 million shares is completed, he will continue to own 5.6 million shares of
Class A stock, unless BMO exercises its option to buy the additional shares. That would bring Nadal’s total closer to 5 million shares. And that would leave him with about 10.1% of the
firm’s outstanding Class A stock.